Setting up your Bookkeeping System

When we start our new Business adventure, or even sometimes when we are already in it, it is always a good idea to set our Bookkeeping up so that it flows easily. Things become hard if we don’t have everything set up before correctly. You end up feeling like you are out of control and chasing your tail all the time.

Today I want to look at what you should put in place to make sure that your bookkeeping flows smoothly and therefore reduces some of your stress.


In today’s age we cannot get away with just putting all our receipts into a shoe box and taking it to the Accountant once a year to get out tax done. All Small Businesses should have their own Accounting Program and should be doing their Bookkeeping or getting it done by someone.

Selecting the Software

The first thing you need to do is select an Accounting Program that you are going to use for your bookkeeping. There are different was to for which you can do this.

  1. Ask your Accountant
  2. Ask a Bookkeeper
  3. Ask friends
  4. Ask Social Media Platforms

I would highly suggest that you ask your Accountant first, because if you happen to choose a package that your Accountant doesn’t use then you will be up for more expenses.

I would also highly suggest that you don’t use anything that is ‘free’ as most times the program wont suit the ATO’s requirements and you will be then left with having to redo your bookkeeping or pay someone to redo it for you.

I would also highly recommend that you get one that is set up for the Australian Tax System. With the Universe being so small now due to Social Media and the internet, we often come across programs that people from different countries highly recommend to use and these programs may just be perfect for that country, but unless they have been set up with the Australian Tax System in mind, they will not work for you.

I have also written some blogs around how to choose software, you can click on the links below and have a read.

Accounting Software Vs Online Accounting Solutions

Choosing the Right Accounting Program

Learn the Software

Once you have chosen the software that is going to suite your business, then you need to learn it. Find a book or find some YouTube videos on the software and learn it. Most software companies will have heaps of videos on how to use their software, jump on line and watch as much as you can without overloading yourself.

Set up the Software

Once you are familiar with the software it is then time to set it up. You will need to enter a Chart of Accounts, Suppliers, Customers, Items and a few other things. I would highly suggest not to let the software program set up its own Chart of Accounts. They are very large and you do not need most of the things that you they put in it.

I have written a few blogs about how to set up your Chart of Accounts, and included with those blogs are downloadable versions of the Chart of Accounts.

What is a Chart of Accounts and how can it help you achieve more in your Business

How setting up your Chart of Accounts correctly can get you the right Reports

Filing Systems

We all hate filing, but if you are on top of your filing then your life will feel in control (well your bookkeeping life anyway).

Understanding your Filing Requirements

The first thing when you get to your filing is to work out what you are legally required to keep and what you can get rid of. I have written a blog on this, which I have included below so that you can read it and get your head around what stays and what can go.

What Is Your Legal Requirement When It Comes To Keeping Paperwork?

Setting up your Filing System

Once you understand what you need to keep and what you can throw out, you then need to set up an effective filing system. The simpler it is the more chance you have of actually doing the filing.

Once again, I have already written a blog around this, so have a read and

How to set up a basic filing system


The next stage is to look at your paperflow, how does the invoices/bills/receipts etc come into your business? Where do you put it? How do you stop things from getting lost. Does this papework that comes into your business have to be transferred between departments before getting to the person who enters the data and pays the bill?

Setting up your Paperflow

Once you understand how the paper flows through your business each day, you then need to set up an effective paperflow system. Once again, as with the filing, the simpler the system is the more chance you have on doing it each time and also of not losing receipts etc.

I have written a blog that will give you some more ideas around setting up your paperflow and how to control your receipts/bills/invoices.

You’ve set up your filing system… now what?

HR (Human Resources)

If you employ or are going to employ staff at some stage you will need to put some things in place. You wont necessarily need a dedicated staff member to work full time as your HR Officer, but you will need someone to take control off all the paperwork involved in employing people and the payroll process.

I have written two extensive blogs around employing staff. I have provided the links below for you to click on them and read those blogs.

So you want to employ staff, what now?

Employing Staff

Employee or Contractor

The first thing you have to do is establish if you are employing a staff member or taking on a contractor. This is a very important thing to establish as the laws are different around each thing. I have written a blog around this subject, so instead of repeating everything about it here I have provided you with the link below.

Employee Vs Contractor

Find the Award

Once you have established that you are actually employing staff and not taking on Contractors, you will need to find the award that your staff will be employed under. The fastest way to do this is to go to the Fair Work Australia website, you can click HERE to go there.

Employee Pack

You will need to create what I call an employee pack. This pack will contain the following:

  1. Staff Details Sheet
  2. Tax File Declaration Form
  3. Super Choice Form
  4. Fairwork Information Statement


Are you going to employ staff? If so then you will need to make some decisions around your payroll processing.

Selecting the Software

As with Accounting Programs, there are quite a few different Payroll Programs available, from large stand alone ones, to one integrated into your Accounting Software. Most Small Business Owners will only need to use the one integrated into the Accounting Software, but others wont.

So as with the Accounting Program I would suggest you talk to the following people.

  1. Your Accountant
  2. A Bookkeeper
  3. Friends
  4. Ask Social Media Platforms

And once again, I would highly suggest that you ask your Accountant first, because if you happen to choose a package that your Accountant doesn’t use then you will be up for more expenses.

It is also really really important that you use a Payroll Program that is set up to meet the ATO’s requirements. There are so many changes happening around employing staff and the requirements of payroll processing and superannuation payments that if you don’t get it right fines will happen. So the first place to start getting it right is with your Payroll Program.

Learn the Software

Take the time to learn the software, the more familiar you are with the software the easier it will be to process pays each week. As with Accounting Programs, there are some YouTube videos that you can watch on the Payroll Program. And most of the software company’s now have teaching

Setting up the Software

Once you have a better understanding of how to use the program you will then need to set it up. This will require you to put in your employees information into the software and the award information that you obtained from setting up your HR things.

Once all this is in place you will then be ready to roll with your efficient bookkeeping.

I would love to hear from you regarding your booking set up, what program you use, why did you choose it, how you have set up your filing system, how your paper flows throughout your business and hiring of staff. You can leave a comment below, or post on my Facebook page or Twitter using #askthebookkeeper

Please note: I reserve the right to delete comments that are offensive or off-topic.

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